Martin Mansergh (Tipperary South, Fianna Fail)

I thank the Senators who contributed to this debate. As we have seen with the United Nations, the reform of international institutions tends to proceed rather slowly but we must be grateful for what has happened. Obviously, we are discussing decisions taken in 2008 but the situation has accelerated vastly since then and there will be a follow-up to the meeting in 2010. Undoubtedly the global crisis put the IMF centre-stage although a few years previously, if anything, it had tended to have become something of a backwater.

Senator Bradford was right to remark that we should not see the IMF as a bogey man. I was reminded last night in the other House that the Bretton Woods Agreement was about setting up an enlightened, international, new world order after the Second World War and incorporated this into my speech today. Keynes was centrally involved in establishing the agreement. In the 1980s a different economic wind was blowing with the advent of Reagan and Thatcher and monetarism. The IMF was perceived as being harsh and insensitive in dealing with developing countries. That may be somewhat of a caricature and added to in international political debate, but none the less there was a certain foundation to that critique.

Senator Bradford was right to say that growth and development have yet to happen on the continent of Africa. There were calls from one party in the other House last night for the IMF to be abolished, to which I responded that in my experience, having attended two annual IMF meetings in 2008 and 2009, the least developed countries would not appreciate such a development. The IMF is an international body which is of assistance in development and it operates its meetings back to back with the World Bank.

Senator Hanafin is right that since the 1930s people have been very anxious to avoid the mistakes of that decade with its prolonged and deep depression and all the political consequences that ensued. It was undoubtedly a contributory factor to the Second World War during which tens of millions lost their lives. Notwithstanding the depth of the crisis we are experiencing, we should not underestimate the difficulties of many other countries at the present time. We are looking at nothing remotely comparable to the early 1930s and are at an entirely different level of development.

Senator O'Toole alluded to some of the problems concerning the governance of the eurozone, although I did not interpret his remarks as advocating we should try to leave that group. He was talking more of reforming its governance, which is an ongoing debate, especially among the eurozone countries. It has not learned how to deal with crises in the making, but that may have an impact on how we might restore confidence to the eurozone and the associated countries, many of which have had their defences severely tested in recent times. We are talking not only about the situation of individual countries but about the eurozone as a whole. I take the view that membership of the eurozone is of long-term strategic benefit to this country. Any attempt to take another course would be significantly disruptive. The reality is that we have always been, even as a country which is politically independent, part of a currency arrangement. We were either united with sterling, as we were until 1 January 1979, or alternatively linked with the European Exchange Rate Mechanism which crystalised in Economic and Monetary Union. I am confident that there is a role to be played by national central banks, as well as the European Central Bank, in this arrangement, but that is a debate for another day.

In principle, the democratisation of international institutions is progressive, but most international institutions, particularly those with power and economic strength, have weightings attached. The United Nations which is often seen as a model has five permanent members of the Security Council. Within the organisation these member states have vastly more power than all other member states; they have a right of veto, for example. With regard to the IMF, we must bear in mind the big contributors, the biggest by far being the United States. If they are to continue to make that contribution, they must have confidence in the organisation. For a period some ten or 20 years ago the United States, under a Republican Administration, effectively lost confidence in the United Nations and was very slow to make financial contributions.

There is a trade-off to be made if we want to secure the full financial backing and participation of the United States in the IMF. I get the impression, having attended two annual meetings, that most, if not all, countries want to secure the commitment of the United States to the IMF, but if this is to be so, the extension of quotas, votes and the principle of democratisation should not threaten what can be seen as vital American interests. All wealthy countries have a certain fear that they will be converted into cash cows; in the eurozone Germany has the potential to become a cash cow for poorer countries in a process it cannot control.

That is the background to the debate. The 2008 changes which we are discussing represent a cautious move towards democratisation, but the 2010 changes which have also been agreed are perhaps slightly more far-reaching. One should not exaggerate this point.

I thank the House for its support for this progressive measure which is relevance to our domestic position to the extent that there will be a limited reduction in the interest rate we must pay on the IMF element of the loans we will receive. The later agreement, when this round is completed, will have a somewhat larger beneficial effect.

I will respond briefly to comments made by Senators Bradford and Hanafin. Reflecting on what has happened in one of the strange and extraordinary days that we all experience in the Houses occasionally, I very much endorse the view expressed and hope we can have a constructive debate on the issues involved. I hope this will not happen only during the run-up to the general election and that it will be possible for various parties and Independent Members to approach problems in a realistic fashion rather than saying things which would be regrettable later if those parties were in government afterwards. If parties have no likelihood of being in government, they should not mislead the people about what it is possible to achieve. I am firmly of the view that when the election is over, no matter what the strength is of different parties, groups and Independents in representing the people, all elements in the Oireachtas will have to co-operate closely and perhaps be a little more constructive which was not always the case in the past. The Oireachtas can work with the Government of the day to lift the country out of its difficulties and reach a more benign path as soon as possible.